(Jack Birle, The Center Square) The recently passed U.S. Senate infrastructure bill includes controversial provisions such as a vehicle per-mile user fee pilot program as the bill faces uncertainty in the U.S. House.
The $1.2 trillion infrastructure bill, which includes $550 billion of new spending, passed in the Senate on Tuesday by a 69-30 vote. The bill authorizes spending for improvements to roads, bridges, rail, transit and broadband, among other forms of infrastructure.
Within the nearly 2,700-page bill are details for a pilot program for a vehicle per-mile user fee. The idea of a per-mile user fee for vehicles was entertained earlier this year by Secretary of Transportation Pete Buttigieg.
Buttigieg said during an interview with CNBC in March the proposal for a per-mile user fee was one the administration was looking into and had shown “a lot of promise.” After the backlash, he reversed his stance few days later when speaking with CNN.
“That’s not part of the conversation about this infrastructure bill, so just want to make sure that’s really clear,” Buttigieg said.
Despite his assurances the proposal would not be in the bill, a pilot program did appear in the recently passed legislation.
The proposal would “test the design, acceptance, implementation, and financial sustainability of a national motor vehicle per-mile user fee,” according to the text of the bill.
The bill allocates $10 million a year from 2022 through 2026 to create a national per-mile user fee pilot program. It also allocates money for state and local level pilot programs.
The pilot program also would include an advisory board to look over the progress and findings of the implementation.
Critics see the pilot program as a way for the federal government to implement a permanent per-mile user fee for vehicles, raising concerns about privacy.
“The concerns that have the most merit are those about privacy,” said Ulrik Boesen, senior policy analyst at The Tax Foundation. “So how would you track miles traveled in a way that isn’t overly invasive?”
Boesen also said a per-mile user fee for vehicles could be more beneficial economically for taxing road usage than the gas tax.
“Currently, we use the gas tax as a proxy for how much you use the roads, which that proxy is getting worse and worse every year because there are more electric vehicles, cars get more milage per gallon and the rate hasn’t been changed in 30 years,” Boesen said. “Using the miles traveled is much better, direct way of taxing road use than using the gas tax so that makes a lot of sense and has a lot of merit.”
One of the members of the bipartisan negotiating group behind the infrastructure bill defended the proposal. Sen. Mitt Romney, R-Utah, dismissed concerns over the pilot program in a tweet Monday.
“Talk of the infrastructure bill allowing the government to track your driving through a VMT is fearmongering and misinformation,” Romney said. “It creates a VOLUNTARY study to determine how electric cars can support the Highway Trust Fund so the burden isn’t solely on those who pay a gas tax.”
As critics make their concerns heard, the bill faces an uncertain future in the House. Speaker of the House Nancy Pelosi, D-Calif., has said she will not pass the bipartisan infrastructure bill if the $3.5 trillion reconciliation package hasn’t passed.
Sens. Joe Manchin, D-W.Va., and Kyrsten Sinema, D-Ariz., expressed concern over the reconciliation package, which will need support from all 50 Democratic Senators to pass.
“I voted ‘YES’ on a procedural vote to move forward on the budget reconciliation process because I believe it is important to discuss the fiscal policy future of this country,” Manchin said in a statement Wednesday. “However, I have serious concerns about the grave consequences facing West Virginians and every American family if Congress decides to spend another $3.5 trillion.”
Ultimately, there are still more questions than answers when it comes to how the program could shape future tax policy. Boesen said the full impact of the pilot program and the policies it could lead to are unknown.
“There are some concerns with how you design the system in terms of privacy and there’s obviously a concern with rates,” he said. “We don’t know what the rate structure will look like in any proposal that’s four or five years away, so it’s really hard to talk about the impact of such a tax before we know the rate of the tax.”…Original Source…